Multidimensional poverty in the Philippines, 2004–2013: How much do choices for weighting, identification and aggregation matter?

Abstract

Multidimensional poverty comparisons can be sensitive to the choice of welfare indicators, the weights assigned to the indicators, as well as the aggregate poverty measure used. This paper examines the robustness of trends in multidimensional poverty in the Philippines to these choices by presenting estimates for three alternative weighting schemes and three measures of multidimensional poverty. The weighting schemes range from uniform weights similar to those used in the global multidimensional poverty indexes produced by the United Nations development program, to weights based on inverse incidence of different deprivations and those derived from the estimated relationship of deprivations to a survey-based measure of subjective welfare. The multidimensional poverty measures similarly range from the dual cut-off indexes analogous to the United Nations development program’s global multidimensional poverty index, to union-based indexes that count all deprivations, to indexes that are also responsive to the distribution of deprivations. Using data for 2004-13, the paper finds evidence of a significant decline in multidimensional poverty that is robust to these alternatives, although the magnitude of the decline in, and especially the dimensional contributions to, aggregate multidimensional poverty is quite sensitive to the alternatives considered.